Arm set to swallow more of tablet PC market

Warren East, chief executive of Arm, said the market for tablet PCs could grow to as much as 60m unit sales next year as he brushed aside concerns that Intel would pose a major competitive threat to the UK chip company in the fast-growing market.

Arm’s chip design powers almost all major tablet PCs, including Apple’s popular iPad device, but the company faces looming competition from Intel, the world’s biggest chipmaker.

Mr East, however, told the Financial Times that while Atom may appear in some tablet models next year “Atom designs are just not good enough in terms of power consumption [right now]. Intel knows this”.

Arm has been a strong supporter of tablets as a new category of computing device partly because it has had much more success there than in previous attempts to put its chips inside netbook computers.

The relative dearth of tablet models – only Apple, Samsung and Dell have tablets on sale – is set to be remedied by a raft of new devices to be shown at the Consumer Electronics Show at the beginning of next year, Mr East said.

He says that tablet sales next year “will be what they will be. They could be anywhere from 30m to 60m [but] probably at the higher end of that range”.

Gartner, the research firm, estimates that media tablet sales will reach 54m in 2011, up from 19.5m this year.

Mr East admitted that there was still some concern, however, that consumer spending on electronics in the west could weaken over the next few months.

But, he said: “You can’t avoid that, it’s like the weather. We’re concerned that it might rain. There are clouds up there. But what we’ve experienced in 2009 was that Arm still outperformed the industry in a down year.”

While Arm has made some initial headway into the server market in recent months, Mr East said he did not think that market would be a major contributor to Arm’s revenues within the next five years.

“It’s a very low expectation, actually,” he said, citing a need to improve virtualisation software and technical limitations on the current A9 chip.

Instead, Mr East sees far greater opportunities for the company in the increasing use of Arm-based microcontrollers in energy related applications, such as those used in solar and wind-energy generation, as well as in electric motors.

Semiconductor chips are increasingly used in these areas to improve efficiency, which makes Arm’s chips, which are known for their low power consumption, an attractive solution, said Mr East.